Pfizer nearing deal to acquire Allergan, sources say

Sources close to the situation have suggested that US drug giant Pfizer (NYSE: PFE) is advancing its talks with Botox maker Allergan (NYSE: ACT) over a potential acquisition.

According to Bloomberg, Pfizer would acquire Allergan for up to $150 billion, or $380 per share. Last month the two companies confirmed they are in “preliminary friendly discussion” but said no agreement had been reached and there was no certainty that the talks would lead to a deal. It has been said that an announcement on proceedings could be made as early as November 23. A particular advantage to Pfizer would be that Allergan is domiciled in Dublin, Republic of Ireland, allowing Pfizer to lower its tax rate, but the US Treasury Department is moving to deter tax-inversion deals such as this. The Treasury Department’s plans could delay a final agreement and potentially alter terms of the transaction.

New rules announced by the Treasury Department on Thursday would limit the ability of US companies to complete tax-inversion agreements and build on rules implemented last year. They seek to curb “stuffing”, a practice where companies domiciled abroad are made larger before a merger as a way to avoid US tax restrictions.